Viewpoint: Michiganders deserve more choices in electricity suppliers

AP FILE PHOTOThe DTE Energy Conners Creek Power Plant is shown through transmission lines in Detroit. Our Viewpoint writer is urging more competition in the power supply business.

Legislation was recently introduced by Michigan Rep. Ken Horn, R-Frankenmuth, that would completely eliminate competition from the state’s electric market, raising rates for many businesses and perpetuating the rising prices seen under the current monopoly-controlled system.

The 10 percent cap on electric competition was part of the three-bill package, passed in 2008, that included a renewable portfolio standard, regulatory reforms and energy efficiency requirements.

As for my company, Fleet Engineers, we consider ourselves one of the lucky 10 percent. We got in under the 10 percent cap before it was full in both utilities’ territories just 12 months after the law went into effect.

The problem is that there are many, many Michigan businesses that are paying higher utility costs than our neighboring states. This makes Michigan businesses much less able to compete for the same business, and prevents the Michigan economy from reaching its full potential, while preventing the creation of many, many Michigan jobs.

Wes Eklund

Now, with Rep. Horn’s legislation pending, even the few of us enjoying the benefits of electric choice would be forced to choose from the state’s two utilities. That’s not competitive, it’s not business-friendly and it simply doesn’t make good economic sense.

While we have tremendous respect for Michigan’s utilities, Michigan’s energy policy limiting competition is not in the best interests of our residents, our businesses or our economy. After three years with this policy the results are dismal: The cap was met within the first year; demand for more competition continues to soar; and Michigan’s overall major utility rates are now nearly 30 percent higher than they were in 2008. Where we once had rates below the national average, Michigan’s rates are now above the national average and are the highest in the Midwest!

Today, there is a waiting list approaching nearly 10,000 customer accounts, requesting access to alternative energy suppliers — an amount growing weekly. This is a clear demonstration that the market is demanding more choices in electric service.

Unequal access to retail competition makes some Michigan businesses less competitive against other Michigan businesses that were lucky enough to qualify for choice. This is unfair. State government should not be in the business of picking winners and losers, especially based on a government-imposed arbitrary limitation.

Additionally, there is now substantial data that reveals Michigan energy customers are paying a premium for their electricity when compared to other states in the Midwest. Since energy costs are often the second- or third-highest cost element in business, it is reasonable to conclude this artificial limit to competitive electric supply is negatively impacting the competitive landscape for Michigan businesses. Michigan cannot be competitive with “reasonable” energy costs. We must have competitive energy costs.

Gov. Rick Snyder rightly talks about economic gardening: taking care of companies who call Michigan home. Nowhere is this more necessary than in the electric energy sector, where we pay more for electricity than our neighboring states. Interestingly, Detroit Edison today sells power to customers in Ohio, where competition is thriving, for 37 percent less than it sells power to customers here in Michigan!

In contrast to Rep. Horn’s bill, Rep. Mike Shirkey, R-Clark Lake, also recently introduced a bill that would increase the number of companies that could participate in the open market. He offers a fair, measured and moderate approach to addressing the obvious pent-up demand for competition.

Michigan knows how to compete -- and we are good at it. We believe it makes us all better. We have no doubt that competition will create positive change for our two major utilities and help them provide better service and more value to customers.

If Rep. Horn’s legislation passed, Michiganders would continue to be deprived of the good service and innovations that these utilities would be forced to deploy, just as we, and the rest of the businesses in the state do, to keep customers.

We hope this legislation, along with Rep. Shirkey’s bill, will spur the Legislature and the Executive branch to fully examine the issue to help keep Michigan competitive.

Wes Eklund is president of Fleet Engineers Inc. in Muskegon. He also served as president of the Muskegon Lakeshore Chamber of Commerce.